Question

An Apple annual coupon bond has a coupon rate of 4.6%, face value of $1,000, and 4 years to maturity. If its yield to maturity is 4.6%, what is its Macaulay Duration? Answer in years, rounded to three decimal places.

Answer 1

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

11) . Α B C D 1000 4.60% 4.60% Bond face value Annual coupon rate Yield to maturity Years tom maturity Settlement date Maturity date 1/1/2020 1/1/2024 Macaulay Duration 3.744 years 11

Cell reference -

в -Nm 1000 0.046 0.046 Bond face value Annual coupon rate Yield to maturity Years tom maturity Settlement date Maturity date =DATE(2020,1,1) =DATE(2024,1,1) Macaulay Duration =DURATION(C6,07,C3,C4,1,3) years 12

Hope this will help, please do comment if you need any further explanation. Your feedback would be highly appreciated.